Thailand: ERC suspends power purchase deals

Thailand: ERC suspends power purchase deals

The Energy Regulatory Commission (ERC) has suspended approvals for power
purchase agreements (PPAs) of 11 wind farm projects located on Sor Por Kor
land, mostly in Nakhon Ratchasima and Chaiyaphum provinces.

ERC commissioner Viraphol Jirapraditkul said the 11 wind farm developers
have a combined power-generating capacity of 700 megawatts and are awaiting
PPA approval.

They are due to sign PPAs with the Electricity Generating Authority of
Thailand before using the PPAs as collateral for the projects' financing and
construction.

But the Supreme Administrative Court's ruling on a case last week that
renting Sor Por Kor land to build a wind farm in Chaiyaphum was deemed a
misuse of the land, which is designated for farming purposes, has forced the
investors to cancel the project, raising concerns among developers whose
wind farms are located on Sor Por Kor land.

Mr Viraphol said the ERC is waiting for a clear direction on the definition
of Sor Por Kor land usage, which is due to be released to the public after a
discussion initiated by the Agricultural Land Reform Office (Alro), which
leases Sor Por Kor land to investors to build wind farms.

"The Alro will take a few weeks to discuss the issue with economic
policymakers," he said. "PPA approvals are automatically suspended until we
get a clear policy direction from the office."

The suspension of PPAs means the wind farms' commercial operation dates
(CODs) will be delayed, said Mr Viraphol. Most were due to start their CODs
this year.

Since energy policymakers granted wind farm licences to investors in 2008 to
develop and operate them, total power-generating capacity from these
projects is expected to total 1,500MW.

Of the total capacity, some 1,000MW is from projects that leased Sor Por Kor
land, while 500MW stands on privately owned land.

Some 354MW of wind farm power is on Sor Por Kor land and already in
operation by four firms, while 700MW is still waiting for PPA approvals.

A source at the Energy Ministry said investors fear the court ruling will
set a precedent for future projects, and the four firms already in operation
are also concerned.

The four firms already in operation are KRU Co, with a capacity of 103.5MW
in Nakorn Ratchasima and Chaiyaphum, Chaiyaphum Wind Farm Co at 80MW,
Watabak Wind at 60MW and Thepphana Wind Farm at 6.9MW.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1194725/erc-suspends-power-purchase
-deals

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com